In this study, we employ an in vitro model of differentiation of pancreatic precursor cells into hormone-producing cells of the islets of Langerhans so as to better understand regulation of differentiation of precursor cells into mature islet cells with a goal to develop a system that could be used for cell replacement therapy for patients with diabetes mellitus. Development of the endocrine pancreas includes a series of early events wherein precursor cells migrate to form aggregates that subsequently differentiate into islets of Langerhans. We hypothesize that epigenetic marks (or chromatin modifications) of genes important in the function of differentiated islet cells are present in the islet precursor cells. Epigenetic marks are being found to be important in other types of stem cells including embryonic stem cells. We use primarily cells derived from human cadaveric pancreata, human islet-derived precursor cells (hIPCs), to test this hypothesis. hIPCs are a novel cell culture system that allows for proliferation of these precursor cells for at least 30 generations. The proliferating cells can be induced to differentiate into insulin-expressing cells in vitro and when transplanted in to mice increase their content of preproinsulin mRNA at least 100,000-fold. This is a new project. In preliminary experiments, we find that epigenetic marks associated with active genes in other systems are present on chromatin of the insulin gene in adult human islets and hIPCs even though hIPCs do not express insulin. In contrast, epigenetic marks found on repressed genes are not present on the insulin gene in adult islets or hIPCs. We are characterizing these chromatin modifications further.